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Home Loan Tax Benefit

House is one of the biggest investments we would make in our lifetime. Most of us might already know that our home loans are eligible for tax benefits under the Income Tax Act. Availing a housing loan to buy a residential property is a great way of saving up on your tax. Tax deductions can be claimed on housing loan interest payments, subject to an upper limit of Rs 150,000 for a financial year.
According to the Income Tax Act, tax rebates can only be claimed by the loan applicant. Tax benefits under Section 24 and deduction under section 80C of the Income Tax Act can be claimed only when the payment is made. If an individual fall short to make EMI payments, he cannot claim tax benefits for the same.  
If you have availed of a home loan, you can claim tax benefits on both the principal and interest components of the home loan as per the Income Tax Act. These benefits are in the form of deductions available to assesses who have taken a loan to either buy a house or build one. You can reduce your tax liability by a maximum of Rs. 6,250 per month (Rs. 75000 p.a.)

Under section 80(c), repayment of principal of up to Rs. 1 lac is deductible in full from your income which means you can save tax up to a maximum of
Similarly under section 24 of the Income Tax Act, interest is deductible up to a maximum of Rs. 1.5 lac. Thus, this leads to an additional saving of a maximum of Rs. 45,000 p.a.


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